STATE OF ILLINOIS ILLINOIS COMMERCE COMMISSION Dex Media ...

STATE OF ILLINOIS ILLINOIS COMMERCE COMMISSION

Dex Media, Inc.

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Petition for Partial Waivers of Sections

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732.50(a) and (c), 735.180(a)(1), 735.180(d), :

and 735.180(l), and Section 756.110 of

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Title 83 of the Administrative Code.

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16-0066

ORDER

By the Commission:

I. PROCEDURAL HISTORY

On February 5, 2016, pursuant to Section 13-513 of the Public Utilities Act (220 ILCS 5/13-513) ("the Act") Dex Media, Inc., ("Dex Media" or "Petitioner"), as agent for Illinois Bell Telephone Company d/b/a AT&T Illinois ("AT&T Illinois") and as agent for Frontier North, Inc. and Frontier of the Carolinas LLC, Citizens Telecommunications Company Of Illinois d/b/a Frontier Citizens Communications Of Illinois, Frontier Communications ? Midland, Inc., Frontier Communications ? Prairie, Inc., Frontier Communications ? Schuyler, Inc., Frontier Communications of DePue, Inc., Frontier Communications of Illinois, Inc., Frontier Communications of Lakeside, Inc., Frontier Communications of Mt. Pulaski, Inc., Frontier Communications of Orion, Inc. (jointly "Frontier"), filed a verified petition with the Illinois Commerce Commission ("Commission") requesting a partial waiver from 83 Ill. Adm. Code 732.50(a) and (c), 735.180(a)(1), 735.180(d), and 735.180(l), and 756.110. Dex Media indicated that this partial waiver would supersede the variance granted to Dex Media's predecessor in Docket 11-0668.

Pursuant to notice given in accordance with the laws and the rules and regulations of the Commission, this matter was set for a prehearing conference before a duly authorized Administrative Law Judge at the offices of the Commission in Chicago, Illinois on February 11, 2016. Petitioner and Staff were represented by counsel. On February 11, 2016, Petitioner filed a First Amended Verified Petition showing only Dex Media, Inc. in the case caption.

On February 16, 2016, Staff filed a request for investigation that was authorized by the Commission on February 24, 2016. The authorization tolled that portion of Section 5/13-513 that grants a request for waiver 30 days after the petition is filed, if no investigation is conducted.

This matter was continued to May 27, 2016 for hearing. Petitioner submitted Exhibit 1.0, direct testimony of Jeronimos "Mike" Konidaris, Exhibit 2.0, supplemental direct testimony of Mr. Konidaris, and Exhibit 3.0, Mr. Konidaris' affidavit.

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Staff submitted Exhibit 1.0, direct testimony of Dr. James Zolnierek, and Exhibit 2.0, Dr. Zolnierek's affidavit. At the conclusion of the hearing on May 27, 2016, the parties' exhibits were admitted into evidence and the record was marked "Heard and Taken."

II. STATUTORY AND REGULATORY PROVISIONS

Dex Media specifically seeks a waiver from those elements of Sections 732.50(a) and (c), 735.180(a)(1), (d), and (l), and Section 756.110, that require certain information to be published and delivered to customers in a printed paper medium. Dex Media seeks this waiver to allow it to substitute an on-line version of the information required by the cited regulations, and cease over time on a market-by-market basis the printing and distribution of paper directories and Commission required content in all communities in Illinois where AT&T Illinois or Frontier have the obligation under the Commission's rules to publish paper directories. If granted, these waivers would leave in place the requirement to provide the substance of the information identified in the cited regulations, but allow Dex Media to fulfill its regulatory obligations with an on-line version of the information.

Section 13-513 of the Act states, in relevant part, "(A) telecommunications carrier may petition for waiver of the application of a rule issued pursuant to this Act... The petition shall include a demonstration that the waiver would not harm customers and would not impede the development or operation of a competitive market..." (220 ILCS 5/13-513). Also, 83 Ill. Adm. Code 735.50 states:

The Commission, on application of a company, customer, applicant, or user or on its own motion, may grant a temporary or permanent variance from this Part in individual cases where the Commission finds that:

a) the provision from which the variance is granted is not statutorily mandated;

b) no party will be injured by grant of the variance; and

c) the rule from which the variance is granted would, in the particular case, be unreasonable or unnecessarily burdensome.

III. PETITIONER'S POSITION

The Amended Petition states that on September 1, 2004, Dex Media's predecessor, R.H. Donnelley, entered into a directory services license agreement with AT&T Illinois to publish AT&T Illinois' Yellow Pages and White Pages directories in Illinois. The agreement characterized Dex Media as the agent of AT&T Illinois for the purpose of publishing the White Pages directories. Pursuant to the agreement, Dex Media is responsible for all aspects of publishing the AT&T Illinois-branded directories, including sales, marketing, printing, and delivery. Further, Dex Media is contractually obligated to comply with all of AT&T Illinois' legal obligations related to directories, including the

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applicable regulations of the Commission. AT&T Illinois has explicitly authorized Dex Media to seek this waiver on AT&T Illinois' behalf.

The Amended Petition also states that in 2006, Verizon spun off its directory business into Idearc, one of Dex Media's predecessors. Later, Verizon sold its telephone business in Illinois to Frontier. Dex Media has a contract with Frontier making it responsible for all aspects of publishing the Frontier-branded directories, including sales, marketing, printing, and delivery. Further, Dex Media is contractually obligated to comply with all of Frontier's legal obligations related to directories, including the applicable regulations of this Commission. Frontier has explicitly authorized Dex Media to seek this waiver on its behalf.

In Docket No. 11-0668, Dex Media obtained partial relief pursuant to Section 735.50 for its distribution of residential white pages within the City of Chicago on behalf of AT&T Illinois. The waiver now requested would supersede the variance granted by the Commission in Docket No. 11-0668.

Mr. Konidaris stated that market conditions and consumer preferences no longer indicate the need in all telephone directory markets for the annual distribution of paper directories on a saturation basis. Rather, Illinois consumers in many telephone directory markets would be better served by the regular on-line publication of directory information, with the opportunity for any customer to request a paper copy of a current directory covering the customer's local calling area(s) through a request to Petitioner or a request to that customer's local exchange carrier, AT&T Illinois or Frontier.

If the Commission grants the requested waiver, Petitioner expects it would identify, over time, specific local markets where paper directories would no longer be delivered on a saturation basis. Once a market is so identified, Petitioner would notify the Commission and arrange for notification to the affected AT&T Illinois or Frontier subscribers through one or more billing inserts, and Petitioner's obligation for saturation delivery would cease in that market. The decision to cease saturation publication would start a 36-month clock, during which Petitioner would continue to make paper directories available at no charge to subscribers in that market on an on-request basis. Petitioner would continue on-request paper copies for the longer of a 36-month transition period after market-specific notification to the Commission and customers, or until the annual requests for a paper directory drop below 2% of the number of directories delivered to customers as part of the last saturation delivery (prior to the notification to the Commission and customers).

Because this approach implicates limited elements of several Commission regulations, Petitioner provided the affected regulations, in relevant part, and marked in legislative fashion as to how the requested waiver would impact them:

Section 732.50 Customer Education

a) Each telecommunications carrier shall include in the informational pages in the front portion of regularly published telephone directory (whether paper or on line) educational material(s) about the requirements to install, repair, and meet appointments within the specified amount of time, the availability and issuance of customer

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credits and alternative telephone service, and the applicable exemptions. This information shall be of a similar level of detail as that set forth in Section 13-712 of the Act [220 ILCS 5/13-712]. Telecommunications carriers that do not publish or maintain their own on line directories shall take steps to ensure that the directory that lists their customers contains the required information. Until such time as a telecommunications carrier's directory contains such educational materials, the telecommunications carrier shall utilize at least once each quarter bill inserts, bill messages, or direct mailings containing a detailed description of the identified information. The bill inserts, bill messages, or direct mailings shall also indicate that this information will appear in the telecommunications carrier's next directory.

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c) Educational material(s) shall be prominently displayed, clear, accurate and printed (whether on paper or on line) in bold and type of sufficient size and readability. The Consumer Services Division of the Commission shall develop and post on the Commission's website standard minimum education material language that may be used by telecommunications carriers in their directories and bill inserts, bill messages, or direct mailings. Any telecommunications carrier who does not use the language posted on the Commission's website shall use language substantially similar to that suggested by the Consumer Services Division. Each telecommunications carrier shall also provide a forum or forums for continuous public education that may include, but not be limited to, company web site(s), voice response unit(s), or information posted in public location(s).

Section 735.180 Directories

a)

1) Primary telephone directories of all exchanges shall be revised, printed and distributed to customers or updated on line at least once each year. Each directory shall list the name, address and telephone number of all customers, except public telephones. At the customer's request, that customer's listing or a portion of that listing, may be omitted. A company may charge for listing additional names for each main station on separate directory lines.

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d) Upon issuance, one copy of each directory shall be distributed to each customer served by that directory and two copies of each directory shall be furnished to the Commission. A company may meet this obligation through an on line publication of directory information with reasonable notice to customers about the availability

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of that directory. So long as a company is publishing any paper copies of a directory, it shall furnish two copies of the directory to the Commission.

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l) If a company charges for Directory Assistance (information) the company shall, upon request, furnish or make available on line directories for up to five other exchanges in the same area code for each main station line servicing a customer, at no cost to the customer. Where paper directories are available, additional directories will be made available by the company at a charge set forth in the Company's tariffs approved by the Commission.

Section 756.110 Publicity Concerning Relay Service

a) Telecommunications carriers or ITAC, on their behalf, shall publicize the relay service to increase awareness of the availability and use of all forms of TRS offered in Illinois. Efforts to educate the public about TRS should extend to all segments of the public, including individuals who are hard of hearing or speech disabled and senior citizens, as well as members of the general population. Publicity shall include, at a minimum:

1) Annual bill inserts and notices published in the paper directories or included in on line directories;

2) Placement of TRS instructions in telephone directories (whether paper or on line), through directory assistance services, and incorporation of TTY numbers in telephone directories (whether paper or on line);

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b) Relay service information publicized by the telecommunications carriers or ITAC, on their behalf, shall include the items listed in this subsection. Each publication (whether paper or on line) shall include all items whenever feasible and consistent with the purpose of the publicity.

1) Relay service access numbers;

2) A description of the relay service functions offered, which shall include, at a minimum, those prescribed in Section 756.100;

3) Statements of the full time availability of relay service; and

4) Statements advising that for the quickest response, TTY users should directly contact their local 9-1-1 service in emergency situations, or appropriate local emergency agencies in areas where 9-1-1 is not in service, instead of employing the relay service to complete emergency calls, and explaining the process defined in Section 756.205(e).

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Mr. Konidaris agreed to the conditions regarding the implementation of this process in particular market areas, as set forth in Staff's direct testimony and restated below.

IV. STAFF'S POSITION

Dr. Zolnierek explained that Petitioner is seeking waivers pursuant to Section 13-513 of the Act, and that this section provides the Commission with authority to waive application of rules issued pursuant to the Act, if the petitioner demonstrates that the waiver would not harm consumers and would not impede the development of a competitive market. Although Section 13-513 prohibits the Commission from waiving provisions of the Act itself, Dr. Zolnierek observed that there is no explicit statutory requirement that directories be published and distributed.

According to Dr. Zolnierek, Petitioner provided evidence that neither competition nor consumers are likely to be harmed if its request is granted. Mr. Konidaris explained that the vast majority of Illinois consumers have access within their households to the Internet, and therefore are able to access in electronic form all information provided in print directories. (Pet. Ex. 1.0 at 9). Mr. Konidaris also explained that customers throughout Illinois currently have access to toll-free information service and, therefore, even the small number of customers without Internet access will continue to have access to much of the information contained in print directories through toll-free information services. (Id. at 21).

For those customers who do not have access to the Internet, do not have the skill or knowledge to access directory information using the Internet and/or toll-free information services, or generally find print directories to be a preferred format for accessing information, Petitioner's commitment to continue to provide a print copy on-request, which Mr. Konidaris refers to as a "safety net," will further ensure consumers are not harmed by a grant of Petitioner's request. (Id. at 24).

Dr. Zolnierek acknowledged that, while unlikely, consumers could be harmed if the Commission did not include certain conditions. In his opinion, Petitioner's safety net proposal to offer on-request directories was not described in sufficient detail. For example, it is not entirely clear when the three-year period commences with respect to the offering of on-request directories. It is also not clear how Petitioner will notify customers of the availability of on-request directories, how quickly Petitioner will deliver requested directories, or what type of directory customers will receive. Unless these aspects are defined, Petitioner's proposal may not adequately function as a safety net.

Furthermore, the "safety net" that Petitioner proposes may cease to exist by its own terms after three years and, if demand for directories is relatively low, it is unclear how the Commission will assess whether consumers will be harmed by allowing the safety net of on-request directories to expire. Moreover, absent reporting requirements included in Staff's conditions, the Commission will have no way to assess whether Petitioner has complied with its commitments.

Therefore, in order to address these residual concerns, Dr. Zolnierek proposed the following conditions:

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1. Dex Media shall file notices of Saturation Delivery Termination. Dex Media shall notify the Commission through a compliance report submitted in this docket within 90 days of Dex Media's decision to cease saturation delivery in a market. The notice shall include:

(a) The date the decision to cease saturation delivery in the market was made (which should be considered the date that starts the 36 month on-request commitment in Dex Media's proposal);

(b) A description of the affected area (market) that includes a list of each zip code included therein; and

(c) The total number of directories delivered in the affected area in the last saturation delivery prior to the date the decision was made to cease saturation delivery.

2. Dex Media shall file notices of On-Request Delivery Termination. Dex Media shall notify the Commission in this docket through a compliance report submitted in this docket within 90 days of when it ceases offering on-request delivery in a market. The notice shall include:

(a) The date upon which On-Request Delivery was stopped;

(b) A description of the affected area (market) that includes a list of each zip code included therein;

(c) The date upon which Dex filed a notice of Saturation Delivery Termination for the area with the Commission; and

(d) The number of annual requests for paper directory deliveries in the twelve-month period immediately preceding the date that Dex Media ceased offering upon request deliveries.

3. Dex Media shall process requests for directories in a timely manner. In particular, Dex Media shall process requests for on-request directories within 2 business days.

4. Dex Media shall provide any requesting customer that does not receive complete white page directory information as part of a saturation delivery with a directory that includes all omitted white pages listings. When fulfilling requests, Dex Media should not be precluded from including additional directory information (such as yellow page information) at its discretion.

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5. The relevant telecommunications carriers shall notify customers of the option to obtain an on-request paper directory at no cost. Such notification shall be included on or with customer bills no less than once annually until upon-request delivery ceases. The notification should include information on how to request a paper directory, and the Dex Media internet address where customers can find the online directory and a Dex Media link directly to the "front of book" information.

With the adoption of these conditions and the commitments made by Petitioner, Staff recommended that the Commission grant the petition.

V. COMMISSION ANALYSIS AND CONCLUSIONS

No petitions for leave to intervene were filed in this Docket and there are no contested issues.

The Commission finds that Petitioner's request for partial waivers of Sections 732.50(a) and (c), 735.180(a)(1), 735.180(d), and 735.180(l), and Section 756.110 should be granted, subject to Petitioner's adherence to the five conditions set forth by Staff in Section IV, above, and agreed to by Petitioner. (Staff Ex. 1.0 at 6-8; Pet. Ex. 2.0 at 2). Staff and Petitioner agree that the waivers in question would not harm customers and would not impede the development or operation of a competitive market, as required by Section 5/13-513.

The Commission also finds that the waivers granted in this Docket supersede the variance granted in Docket 11-0668.

VI. FINDINGS AND ORDERING PARAGRAPHS

The Commission, having reviewed the entire record herein and being fully advised in the premises, is of the opinion and finds that:

(1) Petitioner filed a verified amended petition with the Commission pursuant to Section 13-513 of the Act, requesting partial waivers of Sections 732.50(a) and (c), 735.180(a)(1), 735.180(d), 735.180(l), and 756.110, that require certain information to be published and delivered to customers in a printed paper medium, and substitute an on-line version of the information on a market-by-market basis in communities where AT&T Illinois and Frontier are obligated to publish paper directories;

(2) the Commission has jurisdiction over the parties hereto and the subject matter hereof;

(3) Petitioner's evidence shows that no harm to customers would result from granting the requested partial waivers from Sections 732.50(a) and (c), 735.180(a)(1), 735.180(d), and 735.180(l), and Section 756.110, as reflected in marked text in Section III above;

(4) Petitioner should implement the partial waivers on a market-by-market basis;

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